Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Unit variable

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Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Unit variable cost is $49 (includes direct materials, direct labor, variable overhead, and variable selling expense). Total fixed cost equals $29,400 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

1. Calculate the break-even number of helmets.

2. Check your answer by preparing a contribution margin income statement based on the break-even units.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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